Page: 219

P. DEN. "ON GERMAN COLONIAL AND WORLD POLICY"

"On German Colonial and World Policy" by Paul Den.
(Second edition, Berlin 1907).

"At present, on the seas there sail, not counting military vessels, approximately 40,000 large merchant ships, steamships and sailing vessels with a net tonnage of 25 million registered tons and with a cargo capacity of 61 million tons at 1,000 kilograms" (p. 37).

"Annually it* yields to the English more than 180 million marks, to the Germans (with 220 fishing steamships) — about 25, and to the French — 10 million marks" (p. 39).

"Germany's maritime coastline is only 1,270 kilometers
in length and comprises only a quarter of its land borders, whereas France is bounded by sea on three sides and has a coastal strip totaling 3,175 kilometers in length" (p. 41).

"According to calculations by Professor Eckert in his book 'The Maritime Interests of the Rhine Region and Westphalia' (1906), one-third of all German maritime imports and considerably more than one-fifth of its total maritime exports pass through Dutch and Belgian ports" (p. 42).

"At the beginning of 1907 the 'Veritas' agency counted 14,656
steamships with 18.9 million registered tons. Of these, England accounted for 6,249 steamships with 9.8 million tons, Germany — 1,351 with 2.1, the North American States — 885 with 1.2, and France — 586 with 0.7 million tons. Of the total of 26,579 sailing vessels with 7.5 million tons, England had the largest number, namely 6,338 vessels with 1.8 million tons. Then came the North American States — 3,695 vessels with 1.5 million tons, France — 1,356, and Germany — 991 with 0.5 million tons each. Between 1882 and 1905, English shipping tonnage through the Suez Canal increased by 103%, whereas German shipping increased by 1,561%!" (p. 43).
* Job in the open sea. Ed.

LENIN COLLECTION

"According to American statistics, coal fields on Earth cover an area of approximately 1,500,000 square kilometers. Of these, 520,000 falls to China, 500,000 to the North American Union, 169,000 to Canada, 91,000 to British India, 62,000 to New South Wales, 52,000 to Russia, 31,000 to England, 14,000 to Spain, 13,000 to Japan, 5,400 to France, 4,600 each to Austria, Hungary and Germany, and 1,300 to Belgium. Their exploitation depends on the depth, quality and location of the coal fields.

"According to English data, in 1905 a total of approximately 840 million tons of bituminous coal worth approximately 6 billion marks was extracted.

World Production of Bituminous Coal in 1905
In millions
of tons
Percentage of total
Per capita of
population
North American Union
350.8
41%
4¼ t.
Great Britain
236.1
5½
Germany
119.3
France
34.8
Belgium
21.5
2.7
Russia
2.3
Japan
1.8
British India
8.4
Canada
7.8
3.5
Australia
9.1
British South Africa
3.6
Other countries
19.1

"The three largest coal-producing states accounted for 83 percent of total production" (pp. 46—47).

"Between 1883 and 1903, coal consumption increased in England by 21%, in Germany by 102%, and in the North American Union by 129%" (p. 47).

"Almost ¾ of English coal exports are shipped to continental Europe and the Mediterranean" (p. 55).

"At their fleet bases, numbering about 40, which exist in all parts of the world, the English have established large coal depots" (pp. 56—57).

P. DEN. "ON GERMAN COLONIAL AND WORLD POLICY" 225

"According to American statistics, the total area of coal deposits on Earth amounts to approximately 1,500,000 square kilometers. Of these, 520,000 falls to China, 500,000 to the North American States, 169,000 to Canada, 91,000 to British India, 62,000 to New South Wales, 52,000 to Russia, 31,000 to England, 14,000 to Spain, 13,000 to Japan, 5,400 to France, 4,600 each to Austria, Hungary and Germany, and 1,300 to Belgium. Their exploitation depends on the depth, quality and location of coal deposits.

According to English data in 1905, a total of approximately 840 million tons of bituminous coal worth approximately 6 billion marks was extracted.

World Extraction of Bituminous Coal in 1905
% of total
Per capita of
In millions of tons
quantity
population
North American States
350.8
41%
4¼
Great Britain
236.1
5½
Germany
119.3
France
34.8
Belgium
21.5
2.7
Russia
2.3
Japan
1.8
British India
8.4
Canada
7.8
3.5
Australia
9.1
British South Africa
3.6
Other countries
19.1

"83% of total extraction fell to the three largest coal-producing countries" (pp. 46—47).

"Between 1883 and 1903, coal consumption increased in England by 24%, in Germany by 102%, in the North American States by 129%" (p. 47).

"Almost ¾ of English export coal goes to continental Europe and the Mediterranean" (p. 55).

"At their naval bases, numbering about 40, which exist in all parts of the world, the English have established large coal depots" (pp. 56—57).

Lenin Collection XXIX

LENIN COLLECTION

"The stockpiles accumulated there are counted in millions of tons. Peez once called these coal depots the signal-posts of English overseas supremacy" (p. 57).

"If one calculates the freight costs of English coal exports to various countries at an average of only 5 marks per ton, then with total exports of 58 million tons in 1906, this represents for English shipping an annual freight income of approximately 300 million marks" (pp. 57—58).

"Unfortunately, it has not yet been possible to displace English coal from the North and Baltic Sea regions. Berlin itself still obtains one-sixth of its coal requirements (mostly coke) from England" (p. 62).

"The difficult position of German industry in securing cotton supplies has been illustrated with figures by State Secretary Dernburg. A price increase of 4 pfennigs per pound increases world cotton consumption costs by 320 million marks. But the price increases since 1899 amounted to billions! Germany consumed 1.6 million bales in 1905 and paid in recent times, depending on fluctuations in New York speculation, annually 150 to 200 million marks more* than previously, that is, five to seven times its annual subsidies to the colonies. Germany must free itself from this tax, from this tribute paid to foreign countries.

"To avoid the effects of stock exchange speculation, English merchants and manufacturers increasingly travel to the southern states and cover their raw material needs on the spot. English manufacturers have purchased large tracts of land in Texas in order to engage in cotton cultivation themselves or to lease the fields" (p. 81).

"In the Union the number of spindles increased from 14.6 million in 1890 to 23.2 million in 1906" (p. 82).

"Union consumption in 1906 amounted to 4.8 million bales (compared to only 3.6 million bales in Great Britain and 1.6 million in Germany). In the early 1860s of the nineteenth century, the Union consumed 20, in the 1880s 32, in the 1890s 35, and since 1900 up to 40 percent of its harvest" (p. 82).

* Den's italics. Ed.

P. DEN. "ON GERMAN COLONIAL AND WORLD POLICY" 227

"If the United States is no longer forced to seek foreign markets for the greater part of its cotton harvest, then the supply of world markets with cotton becomes a question of power" (p. 83).

"As master of the cotton market, the United States possesses in its export tariff system an extraordinarily sharp weapon against Europe. European states must at all costs free themselves from this Damoclean sword. No sacrifice can be too high for them. Ultimately, this is a question of power, which, however, can be resolved through peaceful work" (pp. 87—88).

"Following the excesses of New York cotton speculation in 1903, at the initiative of the Colonial Economic Committee, representatives of European cotton industry gathered at international congresses in mid-1904 in Zurich, in April 1905 in Brussels, in June 1906 in Manchester, and in May 1907 in Vienna to work out counter-measures" (p. 88).

"The promotion of cotton cultivation under the German flag is one of the most important tasks of German colonial economy and colonial policy. Bismarck already recognized this" (p. 90).

"Through the promotion of cotton cultivation in the colonies, Germany not only gains the prospect of secured supply of the indispensable raw material, but the colonies themselves thereby enjoy lasting benefits in their development and develop as consumers of German industrial products.

"From cotton cultivation in the German colonies, the Social Democrat Calwer expects benefits also for German workers" ... ("Socialist Monthly Papers" 1907, Issue 3) (pp. 96—97).

"England possesses in Africa 18,369, France 5,657, Germany 1,398 kilometers, Portugal 1,173, Italy 115, and the Congo State 642 kilometers of railroads" (p. 104).

"Despite all their calculations, opponents of colonialism, apart from the Social Democratic nihilists, have nevertheless avoided drawing the final conclusion, — they have shrunk from declaring a possession worthless which demands such large subsidies, they have refrained from demanding abandonment of this possession, and they were very clever in so doing, for this final conclusion reveals the incorrectness of their entire argument" (pp. 113—114).

P. DEN. "ON GERMAN COLONIAL AND WORLD POLICY" 229

"If the United States is no longer obliged to seek sales abroad for the greater part of its cotton crop, then the supplying of the world market with cotton becomes a question of force" (p. 83).

"Being master of the cotton market, the United States has in its export tariff system an extraordinarily sharp weapon against Europe. European states must free themselves from this Damoclean sword at all costs. One cannot reckon with any sacrifices. Ultimately, this is a question of force, which, however, can be resolved through peaceful work" (pp. 87—88).

"At the initiative of the Colonial Economic Committee, representatives of European cotton industry, following the excesses of New York cotton speculation in 1903, gathered at international congresses in mid-1904 in Zurich, in April 1905 in Brussels, in June 1906 in Manchester, and in May 1907 in Vienna to work out counter-measures" (p. 88).

"The promotion of cotton cultivation under the German flag is one of the most important tasks of German colonial economy and colonial policy. Even Bismarck understood this" (p. 90).

"The promotion of cotton cultivation in the colonies not only creates prospects for Germany's secured supply of the most necessary raw material, but also contributes to the steady prosperity of the colonies themselves, which will develop as consumers of German industrial products.

From the development of cotton cultivation in the German colonies, the Social Democrat Calwer expects benefits also for German workers" ... ("Socialist Monthly Papers" 1907, Issue 3) (pp. 96—97).

"England has 18,369 kilometers of railroads in Africa, France — 5,657, Germany — 1,398, Portugal — 1,173, Italy — 115, and the Congo State — 642 kilometers" (p. 104).

"Excluding the Social Democratic nihilists, opponents of colonies, despite all their calculations, nevertheless avoided drawing final conclusions, — they did not dare to declare that possessions requiring such significant appropriations represent no value; they refrained from demanding the abandonment of these possessions, and in so doing they acted wisely, for this final conclusion reveals the incorrectness of their entire position" (pp. 113—114).

LENIN COLLECTION

"The Social Democratic agitators and press organs, especially before the 1907 elections, have waged a furious campaign against German colonial policy, of which the Central organ said that it 'wishes to establish a new German slave state at the cost of the property and blood of the German proletariat.' This policy was supposed to be dealt a 'crushing defeat.'

Despite all this, voices in favor of colonies were also raised in Social Democratic circles and views were rejected which contented themselves with deriding the colonies as valueless sandy deserts.

Objections to the sharply negative position of the Social Democrats toward German colonial policy were raised in early 1907 in the 'Socialist Monthly Papers' by the former Social Democratic deputy Calwer" (p. 121).

"Comrade Calwer showed that he understands the demands of the world situation when in March 1907 he spoke out in the 'Socialist Monthly Papers' against the hostile attitude of the Social Democratic party leadership toward the German Fleet" (p. 130).

"Calwer with full justification ridicules those comrades who believe that one can, without much thought, raise wages in Germany to English or North American levels without first taking care of one's positions in the colonies and on the world market" (p. 132).

"In 1905/6 imports to Persia amounted to approximately 140 million marks. Of these, Russia accounted for 70, England — 30, British India — 16, France — 8, Austria-Hungary — 5, and Germany — barely 3 million marks" (pp. 148—149).

"If the Baghdad Railway were actually completed under German leadership someday, and the English do not abandon their indicated objectives, then the previously remote Persian Gulf could become a focal point of world political storms" (p. 158).

"As a result of the Monroe Doctrine, the interested states, first and foremost England, but also France, Holland and Denmark, will have to reckon with the possibility of losing their colonies in the foreseeable future" (p. 196).

"According to semi-official data, German capital investments in land ownership, industry, railroads and trade totaled by the end of 1904, for all of America, 5 to 6, and for Central and South America alone, 2.8 to 3.4 billion marks" (p. 229).

"It is presumed that more than 2 billion marks of capital from the United States has been invested in Canadian lands and factories.

According to semi-official reports from mid-1907, capital from the United States in Mexico amounted to approximately 3½ to 4 billion marks" (pp. 232—233).

"According to an agreement concluded between the two largest electrical companies of Europe and America, the General Electrical Company in Berlin and the General Electric Company in New York, they divided the world market into two spheres of interest. In doing so, the American company managed to secure for itself Central and South America as its exclusive field of operations" (p. 249).

"Where preferential tariffs were introduced, they proved insufficient to displace foreign trade. Such preferential tariffs will always be imposed only in very limited measure, since local interests, especially those of developing industries, but also those of declining agriculture, require not only certain protection but also the elimination of all foreign monopolies. This opposition is so great that it will prevent both the Greater British and the all-American tariff aspirations from achieving their ultimate goal — creating a completely closed customs union.

Both these formations were opposed by all modern world economic development, with its inherent drive toward creating international trade on the basis of overcoming artificial barriers, with the necessity for strong states to secure free scope for economic activity beyond their own borders and even beyond their own continent. In fact, the aspirations toward forming large, self-sufficient customs unions have receded into the background" (pp. 254—255).

"There is no struggle for supremacy in Europe. Should it be provoked by England, it does not necessarily have to lead to war. So long as the Liberal ministry remains in power, peace is assured, for among its most faithful supporters are precisely those English friends of universal peace who harbor no hostility toward Germany" (p. 329).

NOTEBOOK

H. N. BRAILSFORD. "THE WAR OF STEEL AND GOLD"

pp. 1—45

18697
Brailsford I*
Cf. excerpts from p. 164**

Brailsford II

* Excerpts were made by N. K. Krupskaya in two notebooks; there are several underlinings in the text (see italicized passages) and several notes by Lenin in the margins (see struck-through passages and NB). The notation on the notebook covers, description of the book and page numbering were done by Lenin (see passages in bold type).

Lenin's evaluation of Brailsford's book is given in the article "The Collapse of the Second International," written in summer 1915 (see Works XVIII, 248, note). Ed.

** See p. 254 of the Collection. Ed.

Brailsford I
Cf. excerpts from p. 164*
Brailsford II
p. 255 of the Collection. Ed.

H. N. BRAILSFORD. "THE WAR OF STEEL AND GOLD"

Henry Noel Brailsford: "The war of Steel & Gold". 
A Study of the Armed Peace. London 1914.
(Book dated March 1914) (p. 317).

"In the Balkans it is likely enough that Austria, backed by
the preponderant influence of the Triple Alliance, would have
availed herself of one of the several crises which have followed
the young Turkish revolution, to force her way to Salonica and
to annex a part at least of Macedonia ...

"Europe had a long experience of German 'hegemony' during the quarter of a century which elapsed between the fall of the French Empire and the creation of the Franco-Russian Alliance. Nothing disastrous happened. No little states were over-run, no neighbour's landmarks removed, no thrones overturned, no national or religious liberties menaced" (p. 31).

"In Europe the epoch of conquest is over, and save in the Balkans and perhaps on the fringes of the Austrian and Russian Empires, it is as certain as anything in politics can be, that the frontiers of our modern national states are finally drawn. My own belief is that there will be no more wars among the six Great Powers" (p. 35).

"The present territorial arrangement of Europe follows with few exceptions the lines of nationality" (p. 35).

"Shall the Germans dig for iron ore on the slopes of the Atlas, and carry it in the form of steel rails to Bagdad? That is the typical question of modern diplomacy, and sanely regarded, it is a good deal more important than the typical question of the old world, whether the King of Spain should be a Bourbon or a Habsburg. To settle this question, and similar questions which belong to the same order, the young men of Europe are drilled, the battleships are built and the taxes squandered. Nothing is at stake which can affect the fortunes or ownership of a single acre of European soil. Nothing would be changed in the politics or religion or public life of any European state if these questions were settled otherwise or were not settled at all" (p. 36).

"But who in England would have cared if the iron-ore of Morocco had gone to cast German cannon at Essen, instead of French cannon at Creusot?" (p. 36).

"The Entente Cordiale between Britain and France, which marked the beginning of the tension with Germany, was based, so far as the world knows, upon a single document, which was nothing but a businesslike adjustment of French and British interests in Egypt and Morocco" (p. 37).

"A German firm, the Mannesman Brothers, could indeed boast that it had obtained an exclusive concession to work all the mines of Morocco in return for money which it had lent to an embarrassed Sultan during his civil wars. That this was the real issue is proved by the terms which were more than once discussed between Paris and Berlin for the settlement of the dispute. A 'détente', or provisional settlement of the dispute was concluded in 1910, which had only one clause — that German finance should share with French finance in the various undertakings and companies which aimed at 'opening up' Morocco by ports, railways, mines, and other public works. No effect was ever given to this undertaking, and German irritation at the delays of French diplomacy and French finance culminated in the dispatch of the gunboat 'Panther' to Agadir as a prelude to further 'conversations'. Had M. Caillaux remained in power, we know from the subsequent investigations before the Senate's Committee, how those conversations would have ended. He would have effected not merely an adjustment of French and German colonial interests, but a general understanding which would have covered the whole field of Franco-German relations. The points on which he had begun to negotiate were all economic, and chief among them was a proposal to put an end to the boycott by French finance of the Bagdad railway, and to admit German securities to quotation on the Paris Exchange. The alarm which this bold step by M. Caillaux caused both to French patriots and to British Imperialists is not yet forgotten, and its echo was heard both in London and Paris, when, towards the close of 1913, M. Caillaux returned to office. In those informal negotiations he had made the beginnings of a readjustment in Franco-German relations which would have transformed not merely French but European politics, if he had been Premier for a few months longer. French patriots took alarm and feared that he was about to rob them of their dream of a revenge for 1870. British Imperialists in our Conservative press assailed him from a fear that if France composed her quarrel with Germany, this country would be left isolated. In a single sentence in the debate (27 November, 1911) which followed this Agadir crisis, Sir Edward Grey used a phrase which showed that our diplomacy had shared the fears of our Conservative press. There was a risk, as he put it, that France might be drawn into the orbit of German diplomacy. It was for that reason, and not because it really concerned us how much or how little compensation France paid to Germany in the Congo for her seizure of Morocco, that we were ready to back the less conciliatory diplomacy of M. Caillaux's successors, if need be, by force of arms. This was, perhaps, the most instructive incident in the recent history of European diplomacy" (pp. 38—40).

"The French Périer Bank the other day lent a million pounds to the Turkish Government, which it used to pay the first instalment of the purchase price of a Dreadnought cruiser built in Newcastle. A few days later it was announced that the same bank, obviously as a part of its commission, had obtained a concession for a railway from Smyrna to the Dardanelles. While we must admit that the export of capital could not be carried out without some movement of goods, there is still a sharp distinction to be made between the financier's transaction and simple exchange of goods from the standpoint of the sociology of class. Commerce carried on upon an elaborate structure of credit is more profitable to the investing classes than the simpler exchanges which take place between nations on an equal level of economic development. If we send Welsh coal to France, and receive artificial flowers in exchange, capital makes two profits — the English colliery owner's profit, and the French sweater's profit. But if we lend money to the Argentine, and with it she buys rails here, and afterwards sends out meat to be sold here so that the interest on the loan may be paid, then capital has made three profits — the English steel trade's profit, the Argentine meat trade's profit and the English banker's and investor's profit. It is this third profit which our leisured class chiefly values, and to develop the sort of commerce which requires this credit basis, that is to say commerce with weaker debtor nations, is the object of Imperialism" (pp. 73—74).

"Mr. Mulhall calculated for the Dictionary of Political Economy that our foreign and colonial investments grew between 1882 and 1893 at the prodigious rate of 74 per cent. per annum. But the decisive evidence is supplied by Sir Robert Giffen. Taking the year 1899, he reckoned that the profits on all our external trade in goods, both foreign and colonial, amounted only to 18 millions sterling. The profit on foreign and colonial investments in the same year he puts at between 90 and 100 millions sterling" (p. 77).

"Ten years later, as Sir George Paish stated in a paper which he read to the Royal Statistical Society, our profits from foreign and colonial investments amounted to 140 millions" (pp. 77—78).

"Behind him are the embassies, and behind the embassies are the fleets of all Europe, which would steam at a few hours' notice to Turkish waters, if there were any delay or hesitation in paying over the revenues mortgaged to European railway companies or to the holders of Turkish bonds. Diplomacy and armaments are, in a word, employed to enforce the unconscionable and usurious bargains which Baron Hirsch and his imitators have struck, by means of bribery with Turkish Ministers whose hands no honourable man would condescend to shake" (p. 85).

"The posts in the Army and the Civil Services have long been so numerous that they are opened to the sons of the prosperous middle classes. To these people India and Egypt have acquired, at

P. N. BRAILSFORD. "THE WAR OF STEEL AND GOLD" 241

"...whether the King of Spain should be a Bourbon or a Habsburg. To settle this question, and similar questions which belong to the same order, the young men of Europe are drilled, the battleships are built and the taxes squandered. Nothing is at stake which can affect the fortunes or ownership of a single acre of European soil. Nothing would be changed in the politics, religion or in the public life of any European state from the fact that these questions were settled otherwise or were not settled at all" (p. 36).

"But who in England would have been interested in the fact that the iron ore of Morocco would go for casting German cannon at Essen instead of French cannon at Creuzot?" (p. 36).

"The Cordial Agreement between England and France, which marked the beginning of strained relations with Germany, was based, so far as world public opinion knows, only on one document, which was nothing other than a businesslike regulation of French and English interests in Egypt and Morocco" (p. 37).

"The German firm 'Mannesman Brothers' can with justification boast that it obtained an exclusive concession to work all the mines of Morocco in compensation for money lent by it during the civil wars to a Sultan who found himself in a difficult position. That this was indeed the subject of the dispute is proved by the conditions, which were discussed more than once in negotiations between Paris and Berlin for the purpose of settling the conflict. 'Resolution,' or provisional settlement of the conflict, was achieved in 1910 by an agreement which consisted only of one article — that German capital, together with French capital, would participate in various enterprises and companies aimed at 'opening up' Morocco through the construction of ports, railroads, mines and other public works. This undertaking produced no real results, and German irritation at the delays of French diplomacy and French financial circles resulted in the dispatch of the gunboat 'Panther' to Agadir as a prelude to further 'conversations.' We know from subsequent investigations by the Senate commission how these conversations would have ended if Mr. Caillaux had remained in power. He would not only have adjusted French and German colonial interests, but would have achieved an agreement covering the whole range of Franco-German relations. All the points on which he had begun to negotiate were economic in character, and chief among them was a proposal to put an end to the boycott of the Baghdad railway by French financial circles and to admit German securities to quotation on the Paris stock exchange. The alarm which this bold step by Mr. Caillaux caused both among French patriots and among British imperialists is not yet forgotten, and its echoes were heard both in London and Paris when, toward the end of 1913, Mr. Caillaux returned to office. In these informal negotiations, he had begun a revision of Franco-German relations which would have changed not only French but European politics if Mr. Caillaux had remained Premier for a few more months. French patriots raised an alarm, fearing that he was about to rob them of their dream of revenge for 1870. British imperialists attacked him in our Conservative press out of fear that if France settled her dispute with Germany, England would be left isolated. In one phrase during the debate (27 November 1911) following the Agadir crisis, Sir Edward Grey resorted to expressions which show that our diplomacy shared the fears of the Conservative press. According to his words, there was a risk that France might be drawn into the orbit of German diplomacy. It was for this very reason, and not because we were really interested in the size of the compensation paid by France to Germany in the Congo for the seizure of Morocco, that we were prepared to support the less conciliatory diplomacy of Mr. Caillaux's successors, if necessary, even by force of arms. This was, perhaps, the most instructive incident in the recent history of European diplomacy" (pp. 38—40).

"The French Périer Bank recently loaned one million pounds to the Turkish government, which it used for the first payment on the purchase price of a Dreadnought cruiser built in Newcastle. A few days later, it was announced that the same bank, evidently in return for commission, had obtained a concession for a railway from Smyrna to the Dardanelles. Admitting that the export of capital cannot be carried out without some movement of goods, we, from the standpoint of the sociology of classes, must nonetheless draw a sharp line between a financial transaction and simple commodity exchange. Trade carried on on the basis of developed credit is more profitable to the investing classes than simple exchange occurring between nations at an equal level of economic development. If we send Welsh coal to France and receive artificial flowers in exchange, capital makes a double profit — the profit of English coal mine owners and the profit of French sweaters. But if we loan money to Argentina, on which it buys rails from us, with the intention of subsequently, in order to pay interest on the loan, exporting meat for sale to us, then capital will make a triple profit — the profit of English steel industry, the profit of Argentine meat trade, and the profit of English bankers and investors. It is this third profit that the class living on unearned income values most highly, and the development of this type of trade, requiring such a credit base, that is, trade with weaker debtor nations, is the goal of imperialism" (pp. 73—74).

"Mr. Mulhall, in his 'Dictionary of Political Economy,' calculated that our foreign and colonial investments grew between 1882 and 1893 at an astonishing rate — 74% per year. But the decisive proof was provided by Sir Robert Giffen. He calculated that in 1899, profit from all our foreign trade in goods, both foreign and colonial, amounted to only 18 million pounds sterling. He determined the profit from foreign and colonial investments for that same year at 90—100 million pounds sterling" (p. 77).

"Ten years later, as Sir George Paish stated in a report read to the Royal Statistical Society, our profits from foreign and colonial investments were estimated at 140 million" (pp. 77—78).

"Behind them stand embassies, and behind the embassies — the fleets of all Europe, which would set sail within a few hours upon receiving orders toward Turkish waters if there were any delay or hesitation in payment of revenues guaranteed to European railroad companies or to holders of Turkish bonds. In short, diplomacy and armaments are employed to support unconscionable, usurious transactions concluded with the aid of bribes by Baron Hirsch and his imitators with Turkish ministers, whom no honest man would condescend to shake hands with" (p. 85).

"Positions in the army and in the civil service, for a long time now, have been so numerous that they became accessible to the sons of the prosperous bourgeoisie. For these people, India and Egypt

# [Part 2/3] 246
LENIN COLLECTION

last a real meaning—they are the places where a son, a brother, or at the very least a cousin, is "doing well"» (pp. 86-87).

«The War Trust Exposed, by J. T. Walton Newbold, M.A. (The National Labour Press, Manchester. 1d.), deals chiefly with the inter-relation of the British armaments firms. Armaments and Patriotism, by P. W. W. (The Daily News. 1d.) deals fully with Mr. Mulliner's share in creating the naval scare of 1909. The War Traders, by G. H. Perris (National Peace Council, 167, St. Stephen's House, Westminster. 2d.), contains most of the facts given in the other two pamphlets with some further matter. All of them are based on material which is official and undeniable» (p. 89, note).

«It is a prosperous concern. In the present century Armstrongs has never paid less than 10 per cent., and its dividend often rises to 15 per cent. The great French works at Creusot (Messrs. Schneider) have paid as much as 20 per cent. The building and equipment of a Dreadnought must mean at least a quarter of a million in profits to the firm which secures the contract. Such a stake is worth an effort, and these firms are well equipped for the exercise of political and social pressure. The share-list of Armstrongs alone includes the names of sixty noblemen or their wives, sons or daughters, fifteen baronets, twenty knights, eight Members of Parliaments, five bishops, twenty military and naval officers, and eight journalists. Among those interested in these firms there were last summer two Liberal Cabinet Ministers, a law officer of the Crown and two members of the Opposition Front Bench. There is an amusing correspondence between these share-lists and the membership rolls of the Navy League and the National Service League» (p. 90).

«The true facts were stated at the time by Admiral von Tirpitz in the Reichstag and also by the head of the Krupp firm. Parliament preferred to believe Mr. Mulliner. The result was that Mr. McKenna calculated that Germany would have seventeen Dreadnoughts at "the danger-point", March, 1912, and revised his own programme accordingly. Mr. Balfour even predicted for Germany twenty-one or twenty-five capital ships. The event showed that Admiral von Tirpitz had told the truth: when the time came Germany had nine. The scare cost us the price of four "contingent" Dreadnoughts, a measurable quantity, while it added to Europe's stores of bitterness and mistrust what no figures can reckon» (p. 91).

«The international relations of the firms which trade in armaments offer a tempting field for satire. The inevitable comment lies on the surface of the facts, and they shall be baldly set down here. Capital has no patriotism. A leading German firm turns out to be conducted by French directors. German firms are rebuilding the rival Russian navy. British firms have branches in Italy which are building those Italian Dreadnoughts that are represented as rivals to our own. The Nobel Trust and till lately the Harvey Company were formed of all the leading armaments firms, British, French, German or American. At one time the French firm of Schneider and the German firm of Krupp united in a syndicate to develop the iron ore fields of Ouenza in Algeria» (p. 92).

«All over the world these forces, concentrated, resolute and intelligent, are ceaselessly at work to defeat the more diffused and less easily directed forces which make for disarmament and peace. The number of persons who have anything to gain by armaments and war is relatively small, when measured against the whole population of the civilised world. But their individual stake is larger, and they work in alliance with Society, which regards Empire as a field for the careers of its sons, and with finance which treats it as a field for investment» (p. 93).

«Mr. Gladstone had come into power after the Midlothian campaign with a programme of resolute opposition to Imperialism. The chief act of his administration abroad was the occupation of Egypt. Henceforward Liberalism had a lie in its soul» (p. 103-104).

«Under such influences Liberalism became an Imperialist party, with Lord Rosebery, and, later, Sir Edward Grey as the only possible directors of its foreign policy. Lord Rosebery belonged by marriage to the Rothschild family, and it was the Rothschild influence which brought about the occupation of Egypt» (p. 105).

«There would have been no breach with France, and the Entente Cordiale might have been established some twenty years earlier. European armaments would have been less crushing, and Bismarckian diplomacy less triumphant. Above all, the alliance would never have been concluded which filled the treasury of the Russian autocrat with French gold, and so perpetuated the cruelest of European despotisms» (p. 108).

«"The following public works were commenced or completed during 1907 at Coomassie:—Post Office, female prison, hospital and dispensary, European hospital, laundry in which to wash Europeans' clothes, and several buildings for the Gold Coast Regiments".

«Turning the page, one learns that "a 13-hole golf course has been completed". Gold mines, prisons, barracks, a laundry for Europeans built with public money, and a golf course, these are our works of civilisation. But there is no school» (p. 127).

«In other words, whichever party is in power, the Foreign Secretary will always be an Imperialist, a personality whom the Times, the City and the Conservative Party can unreservedly trust. A Radical can no more become Foreign Secretary than a Roman Catholic can become Lord Chancellor. The doctrine of "continuity" means that foreign affairs have in effect been removed from the sphere of party government, and are now influenced only by the opinions of the governing class, of those, that is to say, who move at court and in society, who regard the army and the civil service as careers reserved for their families, and survey the world beyond these islands mainly as a field for the investment of their surplus wealth» (p. 132).

«Still more important is the impotence of the House of Commons in regard to Treaties. Unless they include financial provisions, there is no obligation to submit them to Parliament, and no discussion can take place upon them until they are already signed, ratified, and published to the world. One consequence of this is that a secret treaty is for us no less binding than a public instrument. A secret treaty duly signed and ratified by one British Government would bind its successors. In theory the King and his Foreign Minister, acting with the consent of his colleagues in the Cabinet, can and do contract the most solemn and vital obligations in the name of the forty millions over whom they rule in these islands, without consulting their elected representatives» (p. 137-138).

«It is frankly admitted in these letters that Lord John Russell, the Prime Minister, was quite unable to control Palmerston, who constantly acted in large issues without the authority either of the whole Cabinet or even of his chief. He even went so far as to recognise Louis Napoleon after the coup d'état entirely on his own responsibility, and against the wishes, not only of public opinion, but of the Queen and his own colleagues. To the suggestion that he should be dismissed, Lord John Russell always answered that if he were dismissed, he would avenge himself by going into Opposition and overthrowing the Government. How just this fear was, events showed. He was eventually forced to resign at the end of December, 1851. By February 1852 he had unseated his late colleagues. A Cabinet which cannot dispense with a Minister must be prepared to give him a free hand» (p. 143-144).

«On the other hand, the world in which she moved was a world of monarchs and governments. Nations she neither knew nor recognised. In the tremendous upheaval between 1848 and 1860, which was creating an Italian people, she saw nothing but a series of aggressions by Sardinia against Austria» (p. 148-149).

«When Palmerston and Louis Napoleon were talking in 1848 of a plebiscite to decide the fate of Lombardy, she declared that "it will be a calamity for ages to come" if peoples are allowed to transfer their allegiance by universal suffrage» (p. 149).

«There must be a more educative propaganda, a more conscious effort to fix principles, before any democracy can be trusted to stand firm in moments of national crisis» (p. 160).

«It is necessary to implant a general and rooted scepticism, which will instinctively ask, when the glowing words and the specious abstractions are deployed, "About what loan or concession or sphere of economic interest are you really talking?" Such a task is beyond the scope, it is sometimes beyond the insight, of the special propagandists of peace» (p. 160).

«Talking to-day of disarmament and arbitration, he will work to-morrow for a party which is hardly less dependent than its rival on the great contractors and bankers who maintain the modern connection of diplomacy and finance. The work of education and organisation on behalf of peace is carried on adequately only by the Socialist parties, and they alone represent a force whose undivided vote will always be cast against militarism and Imperialism» (p. 161).

«...war is an anachronism, indeed, well-nigh an impossibility in a society based on a respect for private property, and accustomed to conduct its business by a system of cosmopolitan credit» (p. 162).

«Let us admit at once that war is a folly from the standpoint of national self-interest; it may none the less be perfectly rational from the standpoint of a small but powerful governing class» (p. 163).

«They are not the "places in the sun" to which the modern Imperialist turns his gaze. He seeks new countries to "exploit", promising regions with virgin mines, untilled fields, cities without banks, routes without rails. These are the opportunities he covets. He is pleased to have them without conquest, and he does not desire war. His ideal is to fence them in as an economic sphere of interest, within which he may dump his capital as a national monopoly.

«This is the process which we must visualise if we would understand the survival of armaments, and it is a process of which Mr. Norman Angell's doctrine takes too little account» (p. 164).

«When the Triple Entente is dominant, it takes Morocco and divides Persia. When the Triple Alliance recovers its lead, it takes Tripoli, assures its hold in Bosnia, and makes progress in the economic penetration of Asiatic Turkey» (p. 167).

«It is characteristic of our civilisation to disguise the connection of diplomacy with armaments on the one hand and finance on the other under an elaborate code of courtesies and hypocrisies» (p. 168).

«If all the Great Powers were to resolve to-morrow by a sudden inspiration of good sense to reduce their armaments by half, that would not free us from the moral consequences of the elusive conflict to adjust the balance of prestige and force» (p. 169).

«It would give some guarantee, if the Committee was well selected, that the policy of the Foreign Office really reflected the will of the nation» (p. 213).

«It is only by concentrating on such proposals as these, but more especially on the creation of a permanent Committee for foreign policy, that a democracy may hope to exert a steady influence on the factors which make for peace and war, govern the growth of armaments, and limit our opportunities for humane service in the world» (p. 217).

«From 1854 to 1906 the City boycotted Russia. The loan of the latter year followed the hints in Sir Edward Grey's speeches, and the evidently inspired articles in the Times which foreshadowed the conclusion of the political understanding then in process of negotiation. The services of finance and diplomacy are mutual, and in the modern world they have become indispensable to each other. It is an immense reinforcement to diplomacy in dealing with a debtor State to know that it has, in effect, behind it the exportable capital of a wealthy nation to give or to withhold. If any Power or group of Powers held the monopoly of the world's money-market even for a few years, and used it with a conscious political purpose, they would in the end dictate to Russia, China, Turkey, and the Latin-American Republics» (p. 221).

«Russia is sensitive because she depends as absolutely as any Latin-American Republic upon her repute in Western markets. She must float by far the greater part of her loans abroad. She cannot even provide from her own resources for the municipal enterprise of her cities. Her undeveloped coal and iron and petroleum fields all await the fertilisation of foreign capital. If we can conceive for a moment what German opinion would mean to us, if we had to float Consols through the Deutsche Bank, if Manchester had to go to Berlin for money to build her tramways, if a South Wales coal mine were awaiting the good opinion of some financier in Hamburg, we shall be able to realise dimly why and how much the good opinion of the English people matters to the Russian Government. Credit is a delicate possession. So long as British investors thought of Russia either as a hostile empire dangerous to ourselves, or as an unstable autocracy menaced by revolution, it was in vain that the Russian financier brought his proposals to the City. Prudence, patriotism and humanity were all against him. The change in the opinions of the moneyed classes began when the Conservative press advocated a rapprochement, when the Times ceased to give prominence to news damaging to the Autocracy, and when it was known that an agreement over Persia was in process of arrangement. There was no mystery about the reasons for this change of attitude. Sir Edward Grey had said that it was necessary to restore Russia to her rank as a Great Power in order to redress the balance in Europe. In plain words, our diplomacy wanted Russian support against Germany, and France was urging and engineering the reconciliation. The early months of 1906 were the critical moment for Russian finance, and it happened to coincide with the critical moment in the development of her constitution. While she was endeavouring to secure a loan of one hundred millions in Western Europe, the elections for the first Duma were about to be held. The Constitution was still a sheet of paper. Everything turned on the ability of the Duma to assert itself, to control the bureaucracy, to make itself the supreme power in Russia. There was one obvious method open to it. It must possess control of the purse, and that meant at the moment control over this foreign loan. If the loan were concluded before it met, the bureaucracy would meet it with its war-chest full. For a few months or weeks European public opinion was potentially the master of Russia's destinies. It professed full sympathy with the constitutional movement, and it had the means of giving its sympathy effect. The Russian Liberals (Cadets) were at one with the Socialists in urging that the granting of the loan should be made conditional on the consent of the Duma. This would have involved a delay of two or three months, but it would have enabled the Parliamentary majority to drive its bargain with a Tsar who had already repented his concessions. Fresh from their sweeping victories at the polls, the Liberals and Socialists might have said to the Tsar's Ministers: "We have Russia behind us, and we have Europe behind us. Your coffers are empty; your credit is exhausted. Concede our full rights of responsible government, and we will vote your taxes and sanction your loan. Deny our rights, and we are convinced that neither in London nor in Paris will you find the money to finance your oppressions". But the great loan had already been floated in Paris and London by March, 1906, and in May when the Duma assembled, it found itself confronted by a Government which had nothing to fear from Russia, and nothing more to hope from Europe. Europe had enabled it to pay its Cossacks. For two generations we closed our money-market to the Tsars. We opened it three months too soon. Had we waited those three months, as the Russian Liberal press implored us to wait, the progressive parties must have triumphed. The Cossack can do little, unless the financier stands behind him. But no Parliament can effectively wield the traditional weapon of supply, if foreign banks have first provided for the despot's needs. The decision, in this instance, rested with London. The Paris banks, weary of the burden of supporting the tottering Russian chaos, had made it a condition of their supporting this loan, that English banks should share the profitable burden. It lay with the English banks on their side to insist on the brief delay required to obtain the Duma's assent. It may be said that "business is business"; one cannot fairly expect a banker, when he is offered a large commission for floating a loan, to weigh all the consequences which his action will have for the liberties of a foreign nation» (p. 225-228).

«With all our buying, we never bought Russian loyalty, nor prevented her from coquetting with the German rival. Yet the cards were all in our hands. Whatever else Germany can do for Russia, she cannot lend her money. Had we made terms before we lent, had we even checked the flow of gold, we could have won some measure of control over Russian policy. If France had backed us (and we were earning her backing during the Moroccan crisis), it ought to have been possible to say to Russia: "No more money until Persia is evacuated". Persia, after all, is a luxury for Russia; money is a necessity» (p. 229).

«Europe made or pretended to make some futile efforts to prevent the outbreak of the Balkan wars. They failed because they were insincere. Russia, as we now know, so far from wishing to prevent the war, had actually arranged it by presiding over the formation of the Balkan League. At the very moment when she joined the concert in declaring that none of the Allies would be allowed to keep the territory they won, she had set her seal to a treaty of partition, and accepted the post of arbiter in the division of the territory. It is such duplicity which makes concerts ineffective. Either of these wars could have been prevented, if the French banks had been forbidden to finance the combatants. They were not forbidden, because Russia willed it otherwise» (p. 230-231).

«The system known as peonage is, on the other hand, general throughout Latin-America, and the capital by which it is worked is often foreign and sometimes British. It is the rule in Mexico and Brazil, and probably in all the more backward Republics of South America. The victim, usually a native, but sometimes a white or a half-breed, incurs a debt to the planter or merchant, and by the Latin-American law of debtor and creditor, which knows no Truck Acts, becomes in effect his slave until the debt is paid off. It never is paid off; the planter keeps the books. Under this transparent fiction of debt, slaves are bought and sold, villages broken up, peasant landowners reduced to the level of serfs, and tribes carried off to distant scenes of oppression. Children are bought and sold, and young women driven into commercial prostitution. All of this is a typical expression of Latin-American civilisation. But foreign capital venturing into these regions adapts itself to its environment, and does in Mexico as the Mexicans do.

[Here the record in the first notebook ends, and N. K. Krupskaya wrote: "Continuation see notebook II". Editor.]

# [Part 3/3] 264

G. E. BRAILSFORD. "THE WAR OF STEEL AND GOLD"

It turns the rather slovenly, inefficient oppressions of the lazy Spanish landowner into a competent and extensive system, conducted with a ruthlessness and on a scale which transcend the habits of the country. The spectacle is not one which a European democracy ought to watch with indifferent eyes and folded arms. If the people of Mexico or Brazil developed a capitalistic system of their own, then however gross its evils might be, the process ought clearly to be allowed to follow its own natural evolution. For purely Mexican wrongs, the Mexicans themselves must find the remedy. But the European financier goes forth equipped with resources taken from our stores on a career of conquest and exploitation, protected by our flag and backed by our prestige» (p. 236—237).

«The debatable area, where recognition might either be granted or refused, would still be considerable, and would include Russia, Turkey, China, Persia, the Portuguese colonies, and most of Latin-America» (p. 242—243).

«If we were to take the sum by which British and German armaments have increased in the present century, it would be possible to allocate the increase, roughly, somewhat as follows: 50 per cent, or less for the settlement of the question, Who shall exploit Morocco?; 25 per cent, or more for the privilege of building a railway to Bagdad and beyond it; 25 per cent, or more for the future eventualities which remain unsettled — the fate of the Portuguese colonies in Africa, and the destinies of China. In the second place, the delimitation of spheres of interest is almost inevitably fatal to the national existence of the country partitioned, and as inevitably adds a vast burden to the commitments of the Imperial Power. Persia furnishes the obvious illustration. Sir Edward Grey is clearly resolved that he will not allow himself by the march of events to be drawn into the assumption of any direct responsibility for the administration of the British sphere. It is a laudable resolve, but Russia may at any moment frustrate it» (p. 246—247).

«Our own claim to the lion's share, the Yangtse Valley, is admitted by no other Power, and it is doubtful whether the Foreign Office still maintains it» (p. 248).

«It is the interest of the whole class which exports capital abroad. But it would be folly to ignore or minimise the direct interest of the trade. It is an interest which happens to be firmly entrenched in political circles, and as the exploit of Mr. Mulliner shows, it is a singularly alert and energetic interest. If public life continues to develop on the present lines, the great scandal of tomorrow will be a discovery that the Liberal Party Funds have been invested not in Marconis, but in Krupps» (p. 267—268).

«What a monstrous theory it is that Britain and Russia, simply because they have considerable material interests, political, strategic, and mercantile, in Persia, should have the right to dispose of the destinies of its people» (p. 290).

«It would, of course, be folly to suppose that the acceptance of this principle of the supremacy of the Concert would at once create harmony, and bring about a reduction of armaments. But it would at once achieve this — it would make a standard for the conscience of the civilised world, it would provide an objective test by which the loyalty of any policy might be tried, and above all it would supply a common ground on which all the parties of peace might take their stand. It would conduce to a gradual slackening of the European tension, a gradual loosening of the existing alliances, and in time create an atmosphere in which a proposal for the reduction of armaments, and eventually some scheme for the creation of a loose Federal Council to decide the common affairs of Europe might at least be considered» (p. 293).

«On the plane of class-egoism armaments are for the capitalist class entirely rational; the competition to accumulate them has an adequate motive, and the struggle for a balance of power is seen to be a phase and expression of modern finance» (p. 310).

«Men are reluctant to allow that the concerns which divide States are at bottom petty and sordid. We dignify them with great abstract words; we invoke the memories of heroic times. We play with the legendary inheritance of the Balance of Power, until we persuade ourselves that our homes are in danger, and our faiths and liberties at stake. These are the terrors of an older world, as insubstantial to-day as the ghosts of Marlborough and Wellington. The Powers struggle to-day over nothing vital, nothing homely, nothing relevant to our daily life. A romantic sentimentalism in the masses plays into the hands of a shrewd realism in the ruling class» (p. 315—316).

## NOTEBOOK 
"EGELHAAF"

P. 1—8

**G. Egelhaaf: "Geschichte der neuesten Zeit vom Frankfurter Frieden bis zur Gegenwart". I. A. Stuttgart: 1915. Vol. IV. pp. 720.**

**[Preface] XI. 1912**

The author is a scoundrel, a Bismarckian. But the book is nonetheless very useful as a compendium of facts and a reference work. A simple compendium presents a picture of imperialism and democratic movements as the chief distinguishing features of the epoch. (NB. The concept of "epoch" is of supreme importance!!) On socialism — extremely little due to the author's dull reactionary character.

The author has a series of historical works, among other things on William I and on Bismarck, a thick volume; then "Grundzüge der Geschichte" — three parts, ancient epoch, Middle Ages, modern times, 1905—1909 (published in Leipzig); and "Politische Jahresübersichten" 1908 and so on until 1912.

It is characteristic to the point of absurdity that this idiot author, giving dates and the like with pedantic exactitude for every petty king, for kings' relatives, for the miscarriages of the Dutch queen (sic! p. 440), etc., — never mentions with a word the peasant uprisings in Rumania in 1907!!
